Market off as oil jumps above $100

By Caroline Valetkevitch

NEW YORK (Reuters) - Stocks fell on Tuesday as crude oil prices rose to a record above $100 a barrel, erasing an earlier rally on concern that higher energy costs could fan inflation and crimp consumer spending and profits.

The broader market turned negative after oil touched a record $100.10 during the session on supply concerns prompted by expectations that OPEC will keep production tight. But the declines in the Dow and the S&P 500 were tempered by energy shares' gains.

Fears of a looming price war among the nation's largest cellphone operators surfaced after three top cellphone operators offered competing unlimited calling plans for $99.99 a month. Verizon Communications Inc (VZ.N) shares fell 6.6 percent.

News that Credit Suisse (CSGN.VX) wrote off $2.85 billion after finding pricing errors on its books further clouded the profit outlook for banks, pulling financial shares lower.

Stronger-than-expected earnings from Wal-Mart Stores Inc (WMT.N) and a slight improvement in how home builders see their industry provided support for shares during the session.

"The big move in oil is having a definite psychological impact," said Chip Hanlon, president of Delta Global Advisors, Inc., in Huntington Beach, California.

The Dow Jones industrial average .DJI slipped 10.99 points, or 0.09 percent, to end at 12,337.22. The Standard & Poor's 500 Index .SPX dipped 1.21 points, or 0.09 percent, to 1,348.78. The Nasdaq Composite Index .IXIC dropped 15.60 points, or 0.67 percent, to close at 2,306.20.

After the closing bell, shares of Dow component Hewlett-Packard Co (HPQ.N) rose 5 percent to $46.10 in extended trade. In results released after the close, the computer and printer maker reported quarterly revenue that beat Wall Street's estimates. HP also forecast quarterly results that exceeded analysts' targets.

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Verizon, which led the Dow's major decliners, ended at $35.34, down 6.6 percent. Its bigger rival, AT&T Inc (T.N), which followed with a similar plan along with Deutsche Telekom (DTEGn.DE), sank 5.3 percent to $35.89.

Shares of Exxon Mobil Corp (XOM.N), which led the advancers in both the Dow and the S&P 500, rose 1.9 percent to $87.01. U.S. crude oil futures for March delivery CLH8 shot up $4.51, or 4.7 percent, to settle at a record $100.01 a barrel on the New York Mercantile Exchange. Earlier, the NYMEX March crude contract touched a record high of $100.10 during the regular NYMEX session.

Wal-Mart shares added 0.4 percent to $49.66 on the New York Stock Exchange.

Wal-Mart, the world's biggest retailer, reported quarterly results that topped analysts' expectations as cost-conscious consumers shopped for discounted goods.

Home builders' stocks also climbed, with the Dow Jones U.S. Home Construction Index .DJUSHB gaining 1.1 percent.

In the financial sector, shares of JPMorgan Chase & Co (JPM.N) fell 1 percent to $42.83.